On a cold October morning in 2012, then-Mayor Michael Nutter stood on the roof deck of the Independence Visitor Center and announced an initiative that he hoped would transform Philadelphia.
“Philly is a perfect place for founders, people looking to start businesses and make things,” Nutter said.
But, he continued, the city had a problem: “Once these ideas are conceived, developed, and built into businesses, many Philadelphia entrepreneurs are too often forced to leave."
They went to New York and San Francisco, searching for money, he said. It happened with Warby Parker, the eyeglass retailer. With Venmo, the digital wallet. With other start-ups, too.
So he announced the launch of Startup PHL, an initiative to provide seed money and support to start-ups and ideas. In the years since, the initiative has provided a total of more than $1 million to dozens of entrepreneurs.
Yet amid it all, another problem emerged. While Philadelphia's start-up spirit skyrocketed with access to funds and the rise of co-working spaces — such places as WeWork and Benjamin’s Desk — Philadelphia fell short for cash-strapped entrepreneurs in one big way: spaces for them to live.
With no regular income or guarantee that investor funding will continue, entrepreneurs can struggle to keep living expenses low as they pour money into their start-ups. Many entrepreneurs do not take salaries. Some investors encourage that.
But one new initiative, Startup Home, is confident that it can fix Philadelphia’s problem. The U.K.-based company is planning in the next year and a half to open two co-living/co-working spaces, in two of the city’s budding neighborhoods.
In the last year, the concept of co-living has exploded with popularity, as companies as large as WeWork have ramped up efforts to create communal living environments.
The idea isn’t necessarily new: Communes and kibbutzim have been around for decades. But now, companies are trying to monetize them.
Unlike other co-living endeavors that simply provide patrons with spaces to live and socialize with like-minded people in a convenient way, Startup Home has billed itself as an incubator of sorts for entrepreneurs, providing them with not just spaces to live and work, but also access to funding, press, and partnerships.
“It’s a networking and living component,” said Simone Tarantino, executive director of U.S. operations for Startup Home. “We're working with companies that might be interested in investing in these start-ups.”
Each room comes furnished, and basic toiletries will be provided. Residents can stay for six-month increments, with the option to renew.
The cost to reside in a co-living space includes co-working dues and, given the common areas — a kitchen, a dining room, and an open-layout working space — is similar to market rates. For a private 250-square-foot bedroom and private bathroom, Startup Home will charge about $1,250 a month, said Tarantino. For a 350-square-foot bedroom with either a queen bed or two double beds, the cost will range from $1,500 to $1,900.
“If you have to spend all your money in rent, then you don't have enough money to start your business,” said Tarantino.
With four locations in the United Kingdom, Startup Homes is making Philadelphia its first foray into the United States.
“Philadelphia has tech, there is angel investing, the city and the state are both a big proponent of fostering entrepreneurship, and on top of that, the real estate is not as expensive as New York or San Francisco,” Tarantino said.
But the company has plans beyond Philadelphia, too. Startup Home is raising about $15 million for six Pennsylvania locations: three total in Philadelphia, two in Pittsburgh, and one in Harrisburg. Each will have one to two dozen private bedrooms.
As it does in Europe, Startup Home plans to offer different themed locations. In Philadelphia, it plans to open, in 2018, a women-in-tech home in Northern Liberties, which the company is building to lease. By the end of the year, it will open its first location along Passyunk Avenue — an undisclosed property it is leasing — that will be open to any sex or industry. The third Philadelphia location has not been planned.
“Now," Tarantino said, "the talent in Philadelphia can stay in Philadelphia."